The IPO Buzz: Rivian Revs Up Above $106 in NASDAQ Debut

Rivian Automotive, Inc. (RIVN) jumped to $106.75 – up nearly 36.9 percent from its IPO price of $78 – in its opening trade on NASDAQ on Wednesday. The electric truck maker – a Tesla rival – supersized its IPO on Tuesday night by pricing the deal at $78 – $4 above the top of its increased price range – and pricing 153 million shares, up from 135 million, to raise $11.93 billion.  Rivian raised the price range on its mega-IPO to $72 to $74 – up from $57 to $62 – in an SEC filing late Friday. (This column, initially published Monday, was updated Wednesday, Nov. 10, 2021, after the closing bell with more news on Rivian’s and Expensify’s trading debuts on the NASDAQ.) 

“It’s the deal of the year,” a veteran IPO trader says.

At the closing bell, Rivian’s stock was up 29.1 percent from its IPO price to end its first day of trading at $100.73. During Wednesday’s session, Rivian hit an intraday high of $119.45, up 53.1 percent from its IPO price of $78.

Rivian is one of the most highly anticipated initial public offerings in recent memory.  It is the biggest IPO since Alibaba in 2014.

IPO bankers expect to raise more than $15 billion this week. 

In Rivian’s case, cornerstone investors were in for up to $5 billion of stock – or about 42 percent of the IPO’s $11.93 billion in proceeds. Those indications came from a “Who’s Who” of big names – Amazon, Blackstone, Capital Research Global Investors, Coatue Management, Dragoneer, D1Capital Partners, Franklin Templeton, the Soros Fund and T. Rowe Price. Amazon alone was in for $200 million of the IPO.

T. Rowe Price, Amazon and Ford Motor Co. are among Rivian’s biggest shareholders.

Morgan Stanley, Goldman Sachs, J.P. Morgan, Barclays, Deutsche Bank Securities, Allen & Co., BofA Securities, Mizuho Securites, Wells Fargo Securities, Nomura, Piper Sandler, RBC Capital, Baird and Wedbush Securities were the joint book-runners of the Rivian deal.

About 4 percent of the stock was reserved for retail investors through SoFi Securities via its SoFi online platform – at Rivian’s request, the prospectus says.

The Irvine, California-based company, which competes with Tesla, began delivering its R1T electric pickup trucks – mostly to employees – in the past few weeks. Most R1T deliveries are expected by year-end. Rivian is also developing an electric SUV. Amazon ordered 100,000 of Rivian’s electric delivery vans. Rivian expects to deliver those Amazon vans by 2025.

Part of Rivian’s appeal is the off-road prowess of its R1T truck, according to Jordan Golson, in his “First Drive Rivian R1T” review on YouTube. The IPO, though, is a bet on EVs becoming mainstream.

The Wall Street Journal reported last Thursday (Nov. 4, 2021) that Laura Schwab, a former Rivian sales and marketing vice president, has sued Rivian over her alleged firing in October after she complained to a Rivian HR executive about the company’s “toxic ‘bro culture’.”

An IPO pro said he doubted that the lawsuit would have any impact on demand for Rivian’s deal.

But some IPO players say they can’t overlook the river of red ink on Rivian’s balance sheet – a net loss of $1.64 billion on essentially no revenue for the last 12 months. Rivian’s only revenue – about $48 million – is from refundable deposits on pre-ordered electric trucks.

Tackling Expenses

Expensify (EXFY), a cloud-based app for expense management, priced its IPO on Tuesday night (Nov. 9, 2021) at $27 – the top of its recently increased price range – and sold 9.73 million shares to raise $262.71 million. Earlier Tuesday, Expensify raised its price range to $25 to $27 – up from $23 to $25 initially – and kept the number of shares at 9.73 million.

The opening trade for Expensify on Wednesday was $39.75 – up 47.2 percent from its $27 IPO price – NASDAQ records showed. During the session, Expensify rose as high as $43.49. Expensify closed its first day of trading (Nov. 10, 2021) at $41.06, up 52.1 percent.

The Portland, Oregon-based company’s IPO was regarded as one of the deals of the week.

J.P. Morgan, Citigroup and BofA Securities were the joint book-runners of the Expensify IPO.    

As of June 30, 2021, Expensify counted 639,000 paid members in 200 countries and territories, the prospectus says.

Expensify is profitable. The company earned net income of $3 million on revenue of $112.5 million for the last 12 months.

Week of Nov. 15, 2021

The IPO Calendar is building for the third week of November. Three companies filed terms early Monday morning (Nov. 8, 2021) and landed on the IPO Calendar: Braze, Inc. (BRZE proposed), KinderCare Learning (KCL proposed) and UserTesting (USER proposed).

More deals have joined next week’s IPO lineup since Monday’s first flurry of filings. The week of Nov. 15, 2021, will be  November’s final five-day week. (The following week includes Thanksgiving Day.)

Stay tuned.  

For more information, please check the IPO Calendar and click on a company’s name, which will take you to the IPO Profile and a link to the prospectus.)

(Never trade on proposed symbols. You might wind up owning something on the OTC Bulletin Board.)

Disclosure: Nobody on the staff has a position in any stocks mentioned above, nor do they trade or invest in IPOs. The staff does not issue advice, recommendations or opinions.

Disclaimer: A SCOOP Rating (Wall Street Consensus of Opening-day Premiums), is a general consensus taken, at press time, from Wall Street and investment professionals concerning how well an IPO might perform when it starts trading. The SCOOP Rating does not reflect the opinions of anyone associated with The SCOOP ratings should not be taken as investment advice. The rating merely reflects the opinion of the professionals at the time of publication and is subject to last-minute changes due to market conditions, changes in a specific offering and other factors, such as changes in the proposed offering terms and the shifting of investor interest.